A Concise History Of Changes In U.S. Tax Law

Benjamin Franklin was correct in his assessment of both death and taxes, but while taxes have been certain, they've been far from consistent. (The receipts you cram into your wallet could be replaced with cash come tax season. To learn more, read 10 Most Overlooked Tax Deductions.)

The Land that Tax Forgot
America was tax-free for much of its early history. That is, free of direct taxation like income tax. It was, after all, taxes that led Americans to revolt against the British in 1773. Following the revolutionary war, the new American government was understandably cautious when it came to taxation – direct taxation was prevented by the constitution for all practical purposes. Therefore, government revenues had to be collected through tariffs and duties on certain items. These excise taxes on liquor, tobacco, sugar, legal documents and so on, betrayed a social agenda as well as a revenue-gathering attempt.

The first challenge to the system came in 1794, when the Whiskey Rebellion broke out. It was basically groups of Pennsylvanian farmers angry about the tax on whiskey burning down tax collectors' houses and tarring and feathering any collectors too slow to get away. Defending the right to collect their indirect taxes, Congress put down the revolt by military force....